Accounts Receivable

6 Months Ended

Jun. 30, 2017

Receivables [Abstract]

Accounts Receivable

Accounts Receivable

The Company maintains a $950 million revolving trade accounts receivable Securitization Facility. Accounts receivable collateralized within our Securitization Facility relate to our U.S. trade receivables resulting from charge card activity. Pursuant to the terms of the Securitization Facility, the Company transfers certain of its domestic receivables, on a revolving basis, to FleetCor Funding LLC (Funding) a wholly-owned bankruptcy remote subsidiary. In turn, Funding sells, without recourse, on a revolving basis, up to $950 million of undivided ownership interests in this pool of accounts receivable to a multi-seller, asset-backed commercial paper conduit (Conduit). Funding maintains a subordinated interest, in the form of over-collateralization, in a portion of the receivables sold to the Conduit. Purchases by the Conduit are financed with the sale of highly-rated commercial paper.

The Company utilizes proceeds from the sale of its accounts receivable as an alternative to other forms of financing to reduce its overall borrowing costs. The Company has agreed to continue servicing the sold receivables for the financial institution at market rates, which approximates the Company’s cost of servicing. The Company retains a residual interest in the accounts receivable sold as a form of credit enhancement. The residual interest’s fair value approximates carrying value due to its short-term nature. Funding determines the level of funding achieved by the sale of trade accounts receivable, subject to a maximum amount.

The Company’s consolidated balance sheets and statements of income reflect the activity related to securitized accounts receivable and the corresponding securitized debt, including interest income, fees generated from late payments, provision for losses on accounts receivable and interest expense. The cash flows from borrowings and repayments, associated with the securitized debt, are presented as cash flows from financing activities.

The Company’s accounts receivable and securitized accounts receivable include the following at June 30, 2017 and December 31, 2016 (in thousands):

	June 30, 2017			December 31, 2016
Gross domestic accounts receivable	$	711,681		$	529,885
Gross domestic securitized accounts receivable	741,000			591,000
Gross foreign receivables	765,718			704,630
Total gross receivables	2,218,399			1,825,515
Less allowance for doubtful accounts	(47,836		)	(32,506		)
Net accounts and securitized accounts receivable	$	2,170,563		$	1,793,009

A rollforward of the Company’s allowance for doubtful accounts related to accounts receivable for six months ended June 30 is as follows (in thousands):

	2017			2016
Allowance for doubtful accounts beginning of period	$	32,506		$	21,903
Provision for bad debts	27,648			13,729
Write-offs	(12,318		)	(10,396		)
Allowance for doubtful accounts end of period	$	47,836		$	25,236